Judge: Daniel S. Murphy, Case: 23STCV10814, Date: 2023-09-06 Tentative Ruling

Case Number: 23STCV10814    Hearing Date: December 6, 2023    Dept: 32

BACKGROUND

            On May 12, 2023, Plaintiffs Gant Griffis and Antonio Ferreira filed this action against Defendants Carter C. Bravmann, John M. Koll, WCS Lending LLC, and U.S. Bank NA. The operative First Amended Complaint, filed September 26, 2023, asserts causes of action for (1) quiet title, (2) trespass, (3) negligence, (4) nuisance, (5) fraud, and (6) declaratory and injunctive relief.

            Plaintiffs are owners of real property located in Los Angeles. Defendants Bravmann and Koll own a neighboring house adjacent to Plaintiff’s property. The complaint arises from the allegation that Defendants built a fence and gate encroaching onto Plaintiff’s property. Defendants allegedly relied on an inaccurate boundary survey before building the fence. After Plaintiffs brought up the issue, Defendants allegedly deceived Plaintiffs into believing that the fence either did not intrude on Plaintiff’s property or only did so by a few inches. Plaintiffs allege that in reality, the fence encroaches onto their property by two feet, preventing Plaintiffs’ use of their driveway.

            On November 1, 2023, Defendants Bravmann and Koll filed the instant demurrer and motion to strike against the FAC. Plaintiffs filed their opposition on November 21, 2023. Defendants filed their reply on November 30, 2023.

LEGAL STANDARD

A demurrer for sufficiency tests whether the complaint states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.) When considering demurrers, courts read the allegations liberally and in context. (Taylor v. City of Los Angeles Dept. of Water and Power (2006) 144 Cal.App.4th 1216, 1228.) In a demurrer proceeding, the defects must be apparent on the face of the pleading or by proper judicial notice. (Code Civ. Proc., § 430.30, subd. (a).) A demurrer tests the pleadings alone and not the evidence or other extrinsic matters. (SKF Farms v. Superior Court (1984) 153 Cal.App.3d 902, 905.) Therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed. (Ibid.) The only issue involved in a demurrer hearing is whether the complaint, as it stands, unconnected with extraneous matters, states a cause of action. (Hahn, supra, 147 Cal.App.4th at 747.)

Any party, within the time allowed to respond to a pleading, may serve and file a notice of motion to strike the whole or any part of that pleading. (Code Civ. Proc., § 435, subd. (b).) The court may, upon a motion, or at any time in its discretion, and upon terms it deems proper, strike (1) any irrelevant, false, or improper matter inserted in any pleading and (2) all or any part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court. (Id., § 436.) The grounds for moving to strike must appear on the face of the pleading or by way of judicial notice. (Id., § 437.)

MEET AND CONFER

Before filing a demurrer or a motion to strike, the demurring or moving party is required to meet and confer with the party who filed the pleading demurred to or the pleading that is subject to the motion to strike for the purposes of determining whether an agreement can be reached through a filing of an amended pleading that would resolve the objections to be raised in the demurrer. (Code Civ. Proc., §§ 430.41, 435.5.) The Court notes that Defendants have complied with the meet and confer requirement. (See Fitzgibbon Decl.)

DISCUSSION

I. Demurrer

Defendants demur to the fifth cause of action for fraud. “The elements of fraud that will give rise to a tort action for deceit are: ‘(a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or ‘scienter’); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage.’” (Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 974, quoting Lazar v. Superior Court (1996) 12 Cal.4th 631, 638.) Fraud must be pleaded with specificity rather than with general and conclusory allegations. (Small v. Fritz Companies, Inc. (2003) 30 Cal.4th 167, 184.) The specificity requirement means a plaintiff must allege facts showing how, when, where, to whom, and by what means the representations were made. (Lazar, supra, 12 Cal.4th at p. 645.)

a. Opinion

“Representations of opinion, particularly involving matters of value, are ordinarily not actionable representations of fact.” (Graham v. Bank of Am., N.A. (2014) 226 Cal.App.4th 594, 606.) There are, however, three recognized exceptions to the general rule: (1) where a party holds himself out to be specially qualified and the other party is so situated that he may reasonably rely upon the former's superior knowledge; (2) where the opinion is by a fiduciary or other trusted person; (3) where a party states his opinion as an existing fact or as implying facts which justify a belief in the truth of the opinion. (Borba v. Thomas (1977) 70 Cal.App.3d 144, 152.)

Here, the FAC alleges the following misrepresentations: (1) on May 9, 2017, Bravmann told Plaintiffs in person that “it was impossible for the fence, gate and motor to be encroaching and that [Plaintiffs’] topographical survey was simply wrong and that Bravmann had three separate certified surveys showing that the fence, gate and motor were on the actual boundary” (FAC ¶ 19); on May 10, 2017, Koll stated that the supposed surveys could not be found and that the companies that conducted them were out of business (FAC ¶ 20); and (3) on May 13, 2017, Koll texted Plaintiffs that “[h]e remembers lot lines being more than like 6” rather than the 12” that the stake marks” (FAC ¶ 20).   

For pleading purposes, the allegations support a reasonable inference that Defendants made specific factual representations about the location of the boundary and the existence of surveys. It is for the trier of fact to determine whether the statements were actually expressions of opinion. Defendants argue that by May 13, 2017, they had acknowledged an encroachment and merely expressed their opinion that the extent of the encroachment was “not a big deal.” (See FAC ¶¶ 20, 62.) Defendants argue that, as a result, the only operative representation was their later opinion about the extent of the encroachment. Defendants cite no authority for the proposition that a later statement negates prior factual representations. Plaintiffs could have detrimentally relied on Bravmann’s earlier statement that there was no encroachment even if Defendants eventually admitted to an encroachment.     

Additionally, Plaintiffs allege that they relied on Bravmann’s expertise as an architect. (FAC ¶ 19.) Opinions are actionable where a party holds himself out as specially qualified. (Borba, supra, 70 Cal.App.3d at p. 152.) It is a factual issue whether Bravmann’s status as an architect sufficiently brings the representations within this exception. The FAC has sufficiently pled the exception for demurrer purposes.

b. Intent and Knowledge of Falsity

At the pleading stage, “it is not necessary to allege the circumstantial evidence from which it may be inferred that the representation or promise was false -- these are evidentiary matters which give rise to the misrepresentation. The only essential allegation is the general statement that the representation or promise was false and that the defendant knew it to be false at the time it was made.” (Universal By-Products, Inc. v. City of Modesto (1974) 43 Cal.App.3d 145, 151.) The complaint here contains the necessary allegations. (See FAC ¶ 64.)

Also, Defendants allegedly did not want to spend the money to remove the encroaching items. (FAC ¶ 26.) This provides a motive for Defendants to lie about the boundary and supports a reasonable inference that Defendants knew their statements to be false and intended for Plaintiff to rely on those statements.

Defendants argue that there is no fraudulent intent because they relied on an inaccurate survey to place the gate structures. (See FAC ¶ 14.) However, the intent behind placing the gate is distinct from the intent to lie about the boundary location. For purposes of fraud, the relevant intent is the intent to lie. Defendants’ innocent mistake in placing the gate does not negate their subsequent misrepresentations about the boundary line. As discussed above, the allegations suggest that Defendants purposely lied about the boundary because they did not want to spend the money to fix the mistake. (FAC ¶ 26.) Therefore, the complaint sufficiently alleges intent and knowledge of falsity.

c. Reliance

Reliance is shown if a misrepresentation “substantially influenced” the plaintiff into an action that he or she “would probably not have” taken absent the misrepresentation. (Hoffman v. 162 North Wolfe LLC (2014) 228 Cal.App.4th 1178, 1193.) A plaintiff must also establish that “(1) the matter was material in the sense that a reasonable person would find it important in determining how he or she would act . . . and (2) it was reasonable for the plaintiff to have relied on the misrepresentation.” (Id. at p. 1194.)

This requires a factual analysis not suitable for demurrer. For pleading purposes, Plaintiffs have sufficiently alleged that they were induced into not further investigating the boundary and delaying their legal options. (FAC ¶¶ 63-66.)

d. Damages

Defendants argue that Plaintiffs have failed to plead damages resulting from the alleged misrepresentations because the encroachment was the same both before and after the misrepresentations. In other words, according to Defendants, nothing changed as a result of the alleged misrepresentations. However, as discussed above, Plaintiffs allege that they relied on the misrepresentations to delay investigation and legal remedies. (FAC ¶¶ 63-66.) Plaintiffs further allege that this has resulted in “general and special damages in an amount according to proof at trial.” (Id., ¶ 67.) This is sufficient for pleading purposes. Whether and how the statements could result in harm are questions for the trier of fact.

II. Motion to Strike

“In an action for the breach of an obligation not arising from contract, where it is proven by clear and convincing evidence that the defendant has been guilty of oppression, fraud, or malice, the plaintiff, in addition to the actual damages, may recover damages for the sake of example and by way of punishing the defendant.” (Civ. Code, § 3294, subd. (a).) “‘Malice’ means conduct which is intended by the defendant to cause injury to the plaintiff or despicable conduct which is carried on by the defendant with a willful and conscious disregard of the rights or safety of others.” (Id., subd. (c)(1).) “‘Oppression’ means despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person’s rights.” (Id., subd. (c)(2).) Fraud is “intentional misrepresentation, deceit, or concealment of a material fact known to the defendant with the intention on the part of the defendant of thereby depriving a person of property or legal rights or otherwise causing injury.” (Id., subd. (c)(3).)

Here, Plaintiffs have alleged that Defendants intentionally trespassed onto Plaintiffs’ property despite being on notice of the property boundary (FAC ¶ 43) and then refused to remedy the trespass because they wanted to save money (id., ¶ 26). This sufficiently establishes a conscious disregard for Plaintiffs’ rights. Additionally, the fraud claim constitutes an independent basis for punitive damages.

CONCLUSION

            Defendants’ demurrer is OVERRULED. The motion to strike is DENIED.